LONDON’S GLOBAL UNIVERSITY
B
FINANCE COMMITTEE
26 March 2013
MINUTES
PRESENT:
Mr Simon Melliss (Chair)
Dr Ben Booth
Ms Natasha Gorodnitski
Professor Sue Hamilton
Mr John Morgan
Professor Alan Thompson
Sir Stephen Wall
Mr Mark Clarke
Professor Malcolm Grant
(President and Provost)
Dr Gill Samuels
Dr Andrea Townsend-Nicholson
Professor Jonathan Wolff
In attendance: Ms Nicola Arnold (Director, Financial Control and Analysis); Mr Andrew
Grainger (Director of UCL Estates); Mr Phil Harding (Director of Finance and Business
Affairs); Miss Valerie Hogg (Director, Financial Planning and Strategy); Mr Rex Knight (ViceProvost (Operations)); Mr Nick McGhee (Secretary to Finance Committee).
Additional attendees: Professor Stephen Caddick (for Minute 55), Mr Jack Foster (for
Minute 72), Mr Adam Harman (for Minute 72).
Apologies were received from Mr Ven Balakrishnan and Dr Bob Barber.
Key to abbreviations used in these Minutes:
BEAMS
CPD
FBA
FC
HE
HEFCE
HEI
IP
IQR
MRC
OFFA
REF
SLMS
SMT
School of the Built Environment, Engineering Sciences, and Mathematical and
Physical Sciences
Continuing Professional Development
Finance and Business Affairs
Finance Committee
Higher Education
Higher Education Funding Council for England
Higher Education Institution
intellectual property
Internal Quality Review
Medical Research Council
Office for Fair Access
Research Excellence Framework
School of Life and Medical Sciences
Senior Management Team
UCL Finance Committee, 26 March 2013 – Minutes
Preliminary Formal Business
51
DECLARATION OF INTERESTS
Discussion
51.1
52
Any member of Finance Committee who had (or who knew of
a family member who had) a material, personal, financial or
other beneficial interest in any item on the Agenda was
requested to declare that interest at the beginning of the
meeting in order that such declaration could be recorded in
these Minutes. No such interests were declared.
MINUTES
Approved
52.1
53
The Minutes of the meeting held on 24 January 2013 [FC
Minutes 33-50, 2012-13] were confirmed by the Committee and
signed by the Chair.
MATTERS ARISING FROM THE MINUTES
Received
53.1
APPENDIX FC 4/46 (12-13) – a paper outlining action taken
on, or giving responses to, matters arising from the meeting of
24 January 2013.
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UCL Finance Committee, 26 March 2013 – Minutes
Matters for discussion
54
FINANCIAL UPDATE
Received
54.1
APPENDIX FC 4/47 (12-13) – the Financial Update (March
2013).
54.2
An oral report from Phil Harding, Director of Finance and
Business Affairs.
Reported
54.3
The format of the Financial Update had been amended to
incorporate a greater level of detail in the commentary, as
well as a number of other changes, notably:
analysis of Faculty contribution levels;
information on balance sheet and reserves;
staff FTE data;
enhanced detail of major capital projects and
equipment expenditure.
Further changes were planned in order to provide information
on financial performance by activity, rather than purely by
academic unit.
54.4
The forecast surplus of £10.1m was largely unchanged from
the Q1 forecast. The Update did not take account of the
adjustment to the HEFCE teaching grant set out in
APPENDIX FC 4/55 (12-13) (see Minute 60 below). The
original surplus target of £19m remained in force, however,
despite the adverse variance resulting from the change of
accounting treatment for the receipt of HEFCE capital funds
to cover investment in the Francis Crick Institute.
54.5
The attention of FC members was also drawn to:
a net shortfall against budget of £0.3m in respect of
core academic activity;
an adverse variance of £2.4m in SLMS;
research grant income currently £6m above budget,
although with a lower than projected overhead recovery
rate;
tuition fee income was £0.7m below budget, a
significantly improved position from that reported in the
Q1 update;
an adverse variance of £977,000 in Professional
Services;
a rise in total debt levels, partly due to high levels of
recent billing activity. NHS debt had halved over the past
year.
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UCL Finance Committee, 26 March 2013 – Minutes
Discussion
55
54.6
The reasons for the gap between the current projected
surplus of £10m, and the 'target' surplus of £19m, were
discussed. The Director of FBA was minded to introduce an
element of 'ranged' forecasts in future. It was suggested that
it would be useful to include in future reports additional detail
on the proposed actions to be taken in order to achieve such
targets.
54.7
The 'other' column in the Reserves Analysis on p14 of the
document consisted of non-core income such as
consultancy, CPD, and private patient work. In academic
areas such reserves were ring-fenced and could be carried
forward for up to three years. Such reserves gave Schools
the flexibility to avoid incurring unnecessary additional shortterm expenditure. The Director of FBA noted that further work
was required in respect of development of a reserves policy.
54.8
FC discussed the staffing level data presented in the annexe
to the report. Professional Services staffing levels were
benchmarked against the Russell Group; the rolling
requirement for a 1% annual reduction in budgets was also
noted. The Chair requested for a future meeting a report
setting out an explanation of the staffing levels in ISD and
one other area of Professional Services, differentiating
between 'overhead' staffing and direct academic support, so
that FC members may develop a more detailed
understanding in this area.
CONSULTANCY AT UCL
[Professor Stephen Caddick (Vice-Provost (Enterprise)) was in attendance for this
item.]
Received
55.1
APPENDIX FC 4/49 (12-13) – a paper providing an overview of
consultancy activity at UCL.
55.2
An oral report from Professor Stephen Caddick, Vice-Provost
(Enterprise).
Reported
55.3
UCL permitted an allowance of 40 days per annum for
academic staff to pursue consultancy activities, either
privately or through UCL Consultants. Such activities were
seen as an important first step in developing relations with
external organisations. The arrangements helped to ensure
that appropriate opportunities were provided to academic
staff, and as such had an important impact on retention. They
also brought financial benefit to UCL through the mechanism
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UCL Finance Committee, 26 March 2013 – Minutes
of REF impact metrics. Only those activities carried out
through UCL Consultants could be recorded.
Discussion
56
55.4
FC discussed the comparative data for institutions across the
sector, noting that there was likely to be significant variation
in the methodology used to record such income. The
declaration of consultancy income across the sector was
approximately £300m.
55.5
The standard academic contract did not specify the length of
the working day and there was no requirement on staff to
report their working hours. It was not a straightforward matter
therefore to demarcate private consultancy from working life,
and although there were steps that could be taken to improve
the recording of data in this area if there were sufficient
appetite for this, it was UCL's approach to seek first to make
the support provided by UCL Consultants sufficiently
attractive to encourage more staff to undertake consultancy
work via this route.
55.6
FC noted that IP arising from consultancy activity was
claimed by UCL, whatever mechanism was used for
managing that activity. It was also noted that contributions to
discretionary funds were made from consultancy work.
IMPACT OF CHANGES IN HIGHER EDUCATION FUNDING
Received
56.1
APPENDIX FC 4/50 (12-13) – an assessment of the impact
of recent changes to the HE funding regime on UCL.
Reported
56.2
UCL's modelling at the time of setting the £9,000 home
undergraduate fee had indicated than a fee of approximately
£8,500 would be needed to cover the loss in HEFCE
teaching and capital funding, although a number of significant
aspects of the arrangements remained to be confirmed at
that time. In light of the clarification of the funding
arrangements since March 2011 the current estimate was
that the break-even undergraduate fee was £8,345, but FC
noted that further changes in the funding regime were
anticipated. FC noted the vital role of this income in providing
the means to invest in the student experience, as well as the
Government’s decision not to inflate the maximum £9,000 fee
through to 2014-15 and possibly beyond.
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UCL Finance Committee, 26 March 2013 – Minutes
57
HALLS OF RESIDENCE REVIEW
Received
57.1
APPENDIX FC 4/52 (12-13) – a review of UCL’s Halls of
Residence.
Discussion
57.2
The Chair proposed that discussion of the paper be held over
to the meeting of 19 June 2013. It was suggested that it
would be useful to have an indication at that stage of the
scale of the implicit subsidy to the residential accommodation
owned by UCL.
Matters for approval or information
58
ABACUS PROJECT
Received
58.1
APPENDIX FC 4/53 (12-13) – an update on the ABACUS
programme, including a proposal to increase the original
project budget.
RESOLVED
58.2
59
That Finance Committee approve the revised scope and
budget for the project as outlined in APPENDIX FC 4/52
(12-13).
ESTATE AND FUNDING STRATEGY – UPDATE
[FC Minute 41, 2012-13]
Received
59.1
60
APPENDIX FC 4/54 (12-13) – an update on the development
of an integrated Estate and Funding Strategy.
HEFCE GRANT ANNOUNCEMENT
Received
60.1
APPENDIX FC 4/55 (12-13) – details of the HEFCE adjusted
recurrent grant to UCL for 2012-13 plus the initial recurrent
grant for 2013-14.
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UCL Finance Committee, 26 March 2013 – Minutes
Reported
60.2
61
As a result of replacing estimated with actual student
numbers, the adjusted HEFCE grant for 2012-13 was £1.2m
less than the initial grant announced in March 2012. The
initial recurrent grant for 2013-14 was £5.6m less than in the
current year, including a fall of £6.5m in the teaching grant as
a further cohort of students moved to the new funding
regime, but this was £4.1m higher than the forecast prepared
in June 2012.
CAPITAL PROJECTS DASHBOARD
Received
61.1
APPENDIX FC 4/56 (12-13) – the capital projects dashboard
as at 1 March 2013.
Discussion
61.2
62
With respect to project 19 on the list it was noted that a
recent IQR of Postgraduate Taught provision in the Division
of Biosciences had recommended that UCL Estates
reconsider the redesignation of Room 106 in the Anatomy
Building as a centrally-bookable room.
DEBT WRITE-OFF
Received
62.1
APPENDIX FC 4/57 (12-13) – details of proposed debt writeoffs totalling £ 678,697.
Discussion
62.2
It was suggested that in future versions of the report an
indication of the impact of such write-offs on the financial
forecasts would be useful.
RESOLVED
62.3
63
That Finance Committee approve the proposed debt writeoff set out at APPENDIX FC 4/57 (12-13).
INSTITUTE OF OPHTHALMOLOGY / MOORFIELDS
Received
63.1
APPENDIX FC 4/58 (12-13) – a proposal to commit to the staff
time and expenditure required to develop a business case, for
submission to UCL Council, regarding the relocation of the
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UCL Finance Committee, 26 March 2013 – Minutes
Institute of Ophthalmology to a site on King’s Cross, together
with the Moorfields Eye Hospital.
RESOLVED (on the recommendation of Estates Management Committee)
63.2
64
That Finance Committee approve expenditure to proceed
with developing a business case for the relocation of the
Institute of Ophthalmology to a site at King’s Cross.
PHYSICS BUILDING REFURBISHMENT
Received
64.1
APPENDIX FC 4/59 (12-13) – a proposal to refurbish two
laboratories in the Physics Building on a budget of £2.1m.
RESOLVED (on the recommendation of Estates Management Committee)
64.2
65
That Finance Committee approve the option 4 proposal at
APPENDIX FC 4/59 (12-13) to refurbish the space at a
budget of £2.1m.
DARWIN BUILDING REFURBISHMENT
Received
65.1
APPENDIX FC 4/60 (12-13) – a proposal to refurbish facilities
in the Darwin Building on a budget of £3.6m.
RESOLVED (on the recommendation of Estates Management Committee)
65.2
66
That Finance Committee approve the proposal at
APPENDIX FC 4/60 (12-13).
36-38 GORDON SQUARE
Received
66.1
APPENDIX FC 4/61 (12-13) – a proposal to dispose of a partshare of the lease on 36-38 Gordon Square.
RESOLVED (on the recommendation of Estates Management Committee)
66.2
That Finance Committee approve the disposal of the
School of Pharmacy’s share in the London International
Development Centre, 36-38 Gordon Square, as outlined at
APPENDIX FC 4/61 (12-13).
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UCL Finance Committee, 26 March 2013 – Minutes
67
170 TOTTENHAM COURT ROAD – INSTITUTE OF CARDIOVASCULAR
SCIENCE
Received
67.1
APPENDIX FC 4/62 (12-13) – a proposal to enter into a
sharing agreement with UCLP at 170 Tottenham Court Road.
RESOLVED (on the recommendation of Estates Management Committee)
67.2
68
That Finance Committee approve the proposal to enter
into a sharing agreement with UCLP as outlined at
APPENDIX FC 4/62 (12-13).
97 TOTTENHAM COURT ROAD LEASE EXTENSION
Received
68.1
APPENDIX FC 4/63 (12-13) – a proposal to extend the lease
on 97 Tottenham Court Road.
RESOLVED (on the recommendation of Estates Management Committee)
68.2
69
That Finance Committee approve the proposal to extend
the lease on 97 Tottenham Court Road as at APPENDIX FC
4/63 (12-13).
FACILITY SERVICES CONTRACTS
Received
69.1
APPENDIX FC 4/64 (12-13) – a summary of procurement of
essential soft services from 31 July 2013.
RESOLVED
69.2
70
That Finance Committee approve the proposal to enter
into new facilities contracts, following completion of the
tender process, as outlined at APPENDIX FC 4/64 (12-13).
DATE OF NEXT MEETING
Noted
70.1
Wednesday 19 June 2013 at 10:30am.
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